Eclipse Aviation Asset Sale Approved

The bankruptcy court has entered an order approving the sale of substantially all of the assets of Eclipse Aviation Corporation to EclipseJet Aviation International, Inc. (for more details of the asset sale process, please see an earlier posting available here).  The sale is pursuant to three separate asset purchase agreements between the debtors and the buyer – one of which is for the majority of the debtors’ assets, one of which is for a Cirrus Design Corp. SR20 aircraft, and the last of which is for disputed work-in-progress inventory.

In the order, among other things, the court held that there were numerous justifications for the immediate sale of substantially all of Eclipse Aviation’s assets, including that it could not successfully reorganize other than through a sale because the company lacked sufficient financing to support on-going business operations.  The court’s order also requires the creation of several escrow accounts for portions of the sale proceeds pending the resolution of certain outstanding disputes and other required purposes.

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Agriprocessors Seeks Approval of Asset Sale Procedures

The Chapter 11 Trustee of Agriprocessors, Inc., Joseph E. Sarachek, has filed a motion seeking court approval of procedures governing the solicitation of bids for substantially all of the company’s assets and the sale of substantially all of the company’s assets to stalking horse bidder Soglowek Nahariya Ltd., subject to higher or otherwise better offers.  Agriprocessors filed for bankruptcy on November 4, 2008 in the Northern District of New York bankruptcy court, but its case was later transferred to the Northern District of Iowa.

The company, by the trustee, has executed an offer letter with Soglowek Nahariya (a copy of which is attached to the motion), but that offer is subject to the completion of additional due diligence.  Therefore, the parties have not yet entered into a definitive asset purchase agreement.  Nonetheless, the trustee has requested that the court approve a break-up fee of $2 million and an expense reimbursement of $500,000 in the event that the parties are unable to enter into an APA.  The offer proposes a purchase price for the assets of $40 million in cash, subject to the allocation of cure costs.

The motion also proposes procedures for the solicitation of competing bids for the assets.  Specifically, the trustee proposes a deadline of March 18, 2009 at 3:00 p.m. (Eastern) for the receipt of competing bids.  To be a qualified bid, the bid must include a good faith deposit of 10% of the proposed purchase price.

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United States Trustee Seeks Conversion of Tempe Land Company Bankruptcy to Chapter 7

The United States Trustee for the District of Arizona has filed a motion with the bankruptcy court requesting that the court convert Tempe Land Company, LLC’s chapter 11 bankruptcy case to a case under chapter 7 of the Bankruptcy Code.  Tempe Land filed for bankruptcy protection on December 5, 2008 and its primary asset is a partially-constructed condominium project located in Tempe, Arizona.

Tempe Land previously received funding from the bankruptcy estate of In re Mortgages Ltd. in order to perform work on the condominium project to protect the property from the elements and deterioration in the value of the project.  However, according to the Trustee’s motion, the lenders have raised questions regarding whether the funds were used for that limited purpose and the judge presiding in the Mortgages Ltd. bankruptcy case has entered an order freezing Tempe Land’s access to the remaining loan proceeds. According to Tempe Land’s representative who appeared at the 341 meeting of creditors, Kenneth Losch, Tempe Land does not have any access to other sources of funding and the condominium project will take approximately $45 million to complete.

Therefore, the U.S. Trustee argues that Tempe Land is administratively insolvent and is unlikely to find another source of funding.  Moreover, the Trustee argues that the company has failed to meet its administrative requirements during the bankruptcy case, such as filing monthly operating reports and file necessary professional retention applications.  For these and several other reasons detailed in the motion, the Trustee argues that cause exists for the case to be converted to one under chapter 7 of the Bankruptcy Code.

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Interlake Material Handling Creditors’ Committee Appointed

The United States Trustee has appointed the members of the Official Committee of Unsecured Creditors in the Interlake Material Handling, Inc./United Fixtures Company, Inc. bankruptcy cases.  Interlake filed for bankruptcy in the District of Delaware on January 5, 2009.  The members of the Creditors’ Committee are:

• Heidtman Steel Products, Inc.
• Steel Technologies, Inc.
• Custom Steel Processing
• Alro Steel Corporation
• Coast to Coast Installations, Inc.

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Deadline (Bar Date) Set for Filing Claims Against Bally Total Fitness

The bankruptcy court has set a deadline (or bar date) for the filing of proofs of claim against Bally Total Fitness of Greater New York, Inc. and its affiliates for certain types of claims.  The deadline for the filing of proofs of claim on account of most claims arising before the companies filed for bankruptcy is March 9, 2009 at 5:00 p.m. (prevailing Eastern time).  The governmental bar date is June 1, 2009 at 5:00 p.m. (prevailing Eastern time).  Please note that certain claims are excluded from the bar date.

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Deadline (Bar Date) Set for Filing Claims Against Northeast Biofuels

The bankruptcy court has set a deadline (or bar date) for the filing of proofs of claim against Northeast Biofuels, L.P. and certain of its affiliates for claims.  The deadline for the filing of proofs of claim on account of most claims arising before the companies filed for bankruptcy is August 19, 2009.

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Smurfit-Stone Container Corp. Files First Day Pleadings

As reported earlier, Smurfit-Stone Container Corporation and all of its U.S. affiliates filed for bankruptcy late Sunday night/very early Monday morning (more details on the bankruptcy filing can be found here).  As is customary in large corporate bankruptcy filings, the companies also filed motions and applications for relief from certain bankruptcy code sections and rules in order to allow them to continue to operate their businesses.  The following is a list of the companies’ first day pleadings filed thus far (follow the links to view the documents using netDockets):

• Voluntary Petition (Chapter 11)
• Affidavit of Charles A. Hinrichs in Support of First Day Motions
• Motion for Joint Administration of Related Chapter 11 Cases
• Motion to Extend Deadline to File Schedules or Provide Required Information and Statement of Financial Affairs
• Application to Appoint Claims/Noticing Agent – Epiq Bankruptcy Solutions, LLC as Claims, Noticing, and Balloting Agent
• Motion to Pay Sales and Use Taxes and Other Taxes and Governmental Charges
• Motion to Authorize the Payment of Prepetition Claims of Shippers, Warehouseman and Other Lien Claimants
• Motion to Continue Customer Programs and Broker Programs and Practices in the Ordinary Course of Business
• Motion to Pay Critical Trade Vendor Claims
• Motion to Pay Employee Wages Salaries, Commissions and Other Compensation; (B) Payment of Prepetition Compensation Owed to Independent Contractors and Temporary Workers; (C) Reimbursement of Prepetition Employee Business Expenses; (D) Payments for Which Prepetition Payroll Deductions Were Made; (E) Contributions to Prepetition Employee Benefit Programs and Continuation of Such Programs in the Ordinary Course; (F) Payments of Workers Compensation Obligations; and (G) Payment to Third Parties of All Costs and Expenses Incident to the Foregoing Payments and Contributions; and (II) Authorizing and Directing Applicable Banks and Other Financial Institutions to Honor and Pay all Checks and Transfers Drawn on the Debtors Payroll Accounts to Make the Foregoing Payments
• Motion to Authorize the Debtors to (I) Make Installment Payments Under Prepetition Insurance Premium Financing Agreements, (II) Continue Prepetition Insurance Programs in the Ordinary Course of Business, and (III) Pay All Prepetition Obligations in Respect Thereof
• Motion Prohibiting Utilities from Discontinuing Service , Deeming Utility Providers Adequately Assured of Future Performance, and Establishing Procedures for Determining Adequate Assurance of Payment
• Motion to Maintain Bank Accounts , Authorizing Continued Use of Existing Cash Management System, Authorizing the Continuation of Certain Intercompany Transactions, Waiving the Requirements of 11 U.S.C. § 345(b) on an Interim Basis, and Granting Administrative Expense Status To Post-Petition Intercompany Transactions
• Motion to Approve Debtor In Possession Financing and (I) Authorizing Debtors to Obtain Post-Petition Financing; (II) Granting Liens, Including Priming Liens, and Superpriority Claims Pursuant to 11 U.S.C. § 364; (III) Authorizing Use of Proceeds to Effectuate Payout of Securitization Facilities; (IV) Authorizing Use of Cash Collateral Pursuant to 11 U.S.C. § 363; (V) Granting Adequate Protection Pursuant to 11 U.S.C. §§ 363 and 364; and (IV) Scheduling a Final Hearing
• Joint Motion to File Under Seal Certain Fee Letters
• Motion to Approve Use of Cash Collateral by Calpine Corrugated, LLC Pursuant to 11 U.S.C. § 363; Granting Adequate Protection to Certain Prepetition Lenders Pursuant to U.S.C §§ 361 and 363; and Scheduling a Final Hearing

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Hartmarx Corporation Files First Day Pleadings

As reported earlier, Hartmarx Corporation and its affiliates filed for bankruptcy late Friday (more details on the bankruptcy filing can be found here).  As is customary in large corporate bankruptcy filings, the companies also filed motions and applications for relief from certain bankruptcy code sections and rules in order to allow them to continue to operate their businesses.  The following is a list of the companies’ first day pleadings filed thus far (follow the links to view the documents using netDockets):

• Voluntary Petition (Chapter 11)
• Motion for Joint Administration of Lead Case Hartmarx Corporation with Member Case(s)
• Motion to Authorize to Pursuant To 11 U.S.C. Section 521, 28 U.S.C. Section 156(c) And Rule 2002 Of The Federal Rules Of Bankruptcy Procedure For An Order (A) Authorizing The Debtors To Mail All Notices And (B) Approving The Form Of Agreement With Kurtzman Carson Consultants, LLC As Claims, Noticing, And Solicitation Agent Of The Bankruptcy Court
• Motion to Authorize to Debtors’ Motion Under 11 U.S.C. Section 521 And Fed. R. Bankr. P. 1007 For Order Granting The Debtors Additional Time To File Schedules And Statements
• Motion for Administrative Order Pursuant to 11 U.S.C. Sections 102 And 105(a) And Local Rule 1000-1 Establishing Omnibus Hearing Dates And Certain Notice And Service Procedures
• Motion to Authorize to Motion For Order Under 11 U.S.C. Section 345 And 363 (I) Authorizing Continued Use Of Existing Cash Management System, Maintenance Of Existing Bank Accounts And Continued Use Of Existing Business Forms (II) Authorizing Continuation Of Intercompany Transactions And (III) Waiving Investment And Deposit Requirements
• Motion to Authorize to Motion for Order Under 11 U.S.C. Sections 105(a) 541, And 507(a), Authorizing (A) Payment Of Prepetition Wages, Salaries, And Employee Benefit Plans And Continuation Of Employee Benefit Plans And Programs Postpetition, And (B) Directing All Banks to Honor Prepetition Checks For Payment Of Employee Obligations
• Motion to Authorize to Pay Prepetition Sales, Use, And Other Tax Obligations
• Motion to Authorize to Motion For Order Under 11 U.S.C. Section 363(b), 503(b)(9), 506 And 546(b) Authorizing Debtors To Pay Certain Prepetition (i) Contractor And Supplier Invoices Related To Goods Delivered Within 20 Days Prior To The Petition Date, And (ii) Supply And Distribution Expenses Consisting Of (a) Logistics And Freight Charges, (b) Customs Duties, (c) Warehouse Charges, And (d) Shipping Charges
• Motion to Authorize to Debtors’ Motion For Order Pursuant To Bankruptcy Code Sections 363, 507(a)(7), 1107, And 1108 Authorizing Continuation Of Certain Customer Practices
• Motion to Authorize to Motion For Order Under 11 U.S.C. Sections 105, 366, 503(B) And 507(A) (I) Prohibiting Utilities From Altering, Refusing Or Discontinuing Services On Account Of Prepetition Invoices And (II) Establishing Procedures For Determining Requests For Additional Adequate Assurance
• Motion to Authorize to Application For Order Under 11 U.S.C. Section 107(b), Bankruptcy Rule 9018, And Local Rule 5005-4 Authorizing Debtors To File Exhibit To DIP Motion Under Seal
• Motion to Authorize to Motion For Interim And Final Orders Under 11 U.S.C. Sections 105, 361, 362, 363, And 364 And Bankruptcy Rules 2002, 4001, And 9014 (I) Authorizing Debtors, As Debtors In Possession, To (A) Use Cash Collateral And (B) Incur Postpetition Secured Indebtedness, (II) Granting Security Interests And Super-Priority Claims, (III) Granting Adequate Protection, (IV) Modifying Automatic Stay And (V) Setting Final Hearing
• Declaration Of Glenn R. Morgan In Support Of Chapter 11 Petitions And First Day Pleadings
• Proposed Agenda January 26, 2009 – First Day Hearing

UPDATE: The bankruptcy court has entered orders with respect to certain of the motions and applications.  Details on the orders are available here.

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Smurfit-Stone Container Corp. Files for Bankruptcy in Delaware

Late Sunday evening, Smurfit-Stone Container Corporation and its U.S. subsidiaries filed voluntary chapter 11 bankruptcy petitions in the United States Bankruptcy Court for the District of Delaware. 

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Hereford Biofuels Files for Bankruptcy in Texas

Hereford Biofuels, L.P., formerly known as Panda Hereford Ethanol, L.P., and certain affiliates have filed voluntary chapter 11 bankruptcy petitions in the United States Bankruptcy Court for the Northern District of Texas.  The assets of Hereford Biofuels and its debtor affiliates constitute the Hereford, Texas ethanol refining facility of Panda Ethanol Inc.  Neither Panda Ethanol Inc. or any of its other subsidiaries or facilities are included in the bankruptcy filing.

Panda Ethanol intends to use the bankruptcy filing to facilitate the sale of the Hereford facility under section 363 of the Bankruptcy Code.  In a press release announcing the bankruptcy filing, Panda explained the situation leading to the filing:

“Although the ethanol refinery is in the late stages of construction, on December 31, Panda Ethanol was notified by Societe Generale, the administrative agent for the Hereford subsidiary’s lending syndicate, that one of the major syndicate banks had informed Societe Generale that it would not fund its share of further borrowing requests for the project. After repeated conversations with the syndicate and an unsuccessful attempt to secure debtor-in-possession financing, the Hereford subsidiary’s management concluded that the only prudent option available was to put the facility up for sale through a Section 363 sale process.”

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